Amazon Wins Lawsuit Saying It Didn't Infringe On One Click Patent (A Different One)

from the keep-it-straight-now dept

You probably recall that Amazon holds a rather infamous patent, on one-click ordering online, that has been involved in a fair amount of controversy (and ongoing review). However, less well-known was that, back in 2006, another company, Cordance, claimed that it actually held a patent on one-click ordering and sued Amazon for violating its patent. I hadn't heard much else about the case since, but Michael Scott alerts us to the news that Amazon has won the lawsuit, after a jury found that the company didn't infringe on two of the patents in question, and that the third patent was invalid. The key to victory? Apparently, Amazon explained that the patents in question actually described a process that involved two clicks rather than one.

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Online Auctions No Longer Fun?

from the just-not-worth-the-hassle dept

Lately, whenever we post about eBay, a huge crowd of folks shows up to complain about eBay. Many of the changes that eBay has implemented over the past few years haven't gone over well -- but a Business Week article suggests something else is up also: buyers just aren't interested in the "auction" model as much as they used to be. Personally, I know that's true for me. I remember bidding on a variety of auctions on eBay, but I doubt I've done so in at least five years -- mostly because I can find whatever I'm looking for a decent price and just buy it elsewhere, without the hassle of the auction. When it first came along, the auction process was novel and fun -- and it offered up products that just couldn't be found elsewhere. But, these days, that's very rarely the case. The auction process seems like a pain and most of the products are available in a more convenient manner.

That certainly doesn't mean the end of eBay, or even the end of auctions (as Mathew Ingram notes, auctions are good for a certain class of products). And, as the original article notes, eBay's business has been shifting increasingly to fixed-price sales rather than auctions. But many people still do think of eBay as an auction site, and its biggest near-term challenge may be convincing people that it's more than that.

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Can Borders Actually Compete With Amazon With Virtual Bookshelves?

from the the-magic-shelf-ain't-gonna-do-it dept

Back in 1998 when I worked at an e-commerce startup, I spent a few months working on a project to try to rethink the online retail "browsing" experience. The idea was simple: the experience of browsing an online store was still inherently different than walking into a book or music store, where you would browse across many items on shelves and maybe discover a totally unexpected gem. That process doesn't seem to work as well online. We were unable to solve it a decade ago, but I'm always interested in ways that others try to solve the same problem. However, so far, no one has really been able to do something amazingly useful in the browsing department... and that includes the new Borders website. For years, Borders, the well-known bookstore chain, had handed over its entire online operations to Amazon.com. Basically, if you went to the Borders website, you just saw Amazon.com with a Borders logo. However, a little while ago, the company decided to end that deal and strike out on its own.

The new site has now launched with its main selling point apparently being a shelf-browsing interface using Flash. Unfortunately, it seems that whoever built the website modeled it almost too much like a real physical bookshelf. That is, it includes all of the inefficiencies of a real bookshelf, without adding in many benefits. It's a neat little gimmick, but unless it adds more functionality quickly, it's difficult to see this putting much of a dent into Amazon's efforts. Update: In sort of, but not entirely, related news -- a judge has dismissed an antitrust lawsuit filed against Borders and Amazon for working together. The court found that there was no evidence that the guy filing the suit ever paid more than marketprice for a book due to the two companies working together.

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Shoe Store DSW Sues Zappos For Activities Of Affiliates

from the safe-harbors... dept

There's an interesting lawsuit coming out concerning the popular online shoe store, Zappos, that has built up a large business in part by being extremely focused on providing an excellent customer experience. DSW is a large shoe retailer with many brick and mortar stores and also (not surprisingly) an e-commerce operation (Update: the e-commerce part just launched recently, which has many thinking that this whole event appears to be something of a reverse Streisand Effect situation, where it's suing Zappos to get media attention). Late yesterday, DSW filed a lawsuit against Zappos, charging the company with infringing on DSW intellectual property. What was odd, though, was that DSW never contacted Zappos at all -- preferring to inform it of the lawsuit via press release. Zappos CEO, Tony Hsieh, explained all of this via Twitter, which he's used (quite successfully) to connect and communicate with fans of Zappos.

What came next is quite interesting. Various Twitter followers began investigating the matter, and noticed that a guy using the Twitter name SEOColumbus was defending DSW for filing the lawsuit, while also raving about how much better DSW was than Zappos. Carlo Longino responded to those claims, and then did a quick search discovering that the LinkedIn page of the guy said that he just happened to be DSW's E-Commerce Operations Manager -- something he declined to mention. Soon after Carlo called him on it, though, Carlo noticed that he deleted his LinkedIn profile. The guy claims that he just contracted at DSW for a few months -- but it still seems like he should have disclosed that while bashing Zappos and praising DSW. Update: This part of the story is getting even more bizarre, with claims that the SEOColumbus Twitter account is actually controlled by someone else (which doesn't make much sense, given what the accountholder was saying). And, on top of that, the SEOColubmus Twitter account has now been shut down (temporarily?). Update 2: I've removed the guy's name from this post following a polite request, claiming that the Twitter account really was controlled by someone else. There are numerous inconsistencies in his story that are hard to square up, but at this point we'll take him at his word and thus have removed his name.

As for the lawsuit itself, from the information provided by whoever owns the Twitter account, it seems like it's not due to any actions by Zappos, but by a Zappos affiliate. Just like many e-commerce companies, Zappos lets affiliates sign up and basically drive traffic to Zappos. One of those affiliates set up a site called dsw-shoes.net -- which pretty clearly does infringe on the DSW trademark (which, again, is really about consumer protection, not ownership). It seems reasonable to think that dsw-shoes.net could create some confusion in the customer's mind, even though it has (in tiny print, at the bottom of the page) a note claiming it's not affiliated with DSW. It does, however, link to Zappos using an affiliate code. Given the various safe harbors out there, it certainly seems like DSW went after the wrong target. The complaint should be against whoever operates the affiliate -- not Zappos. An affiliate linking to Zappos should not create liability for Zappos itself. It appears that in DSW's rush to sue Zappos, it didn't bother to understand Zappos is protected against the actions of its affiliates, as it most certainly was not encouraging them to pretend to be DSW. A quick call or letter to Zappos probably would have educated them on this (though, honestly, it should have been obvious from the website in question), but instead, DSW just rushed into a lawsuit, informing Zappos by press release.

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New York Tries To Rope Amazon Into Playing Tax Collector

from the bit-of-a-stretch dept

The New York Times reports that the state of New York is demanding that Amazon and other e-tailers begin collecting sales taxes from customers in the state by June 1 or face audits and bills for unpaid taxes. Under federal law, a state can only require a business to collect sales taxes for it if the business has a physical presence in that state. So Amazon collects sales taxes in Washington state, where it has its headquarters, but not in most other states, including New York. But New York has hit upon a novel legal theory: Amazon might not have a physical presence in New York, but many of Amazon's affiliates do, and New York argues that those affiliates constitute a "physical presence" sufficient to require Amazon to collect taxes for the state. It's a novel theory, and one that Amazon will almost certainly challenge in court. It doesn't make a whole lot of sense to me. Amazon's affiliates are essentially selling Amazon advertising space on their websites. They're not employees of Amazon any more than I become an employee of any site that purchases advertising space on my blog. If New York's interpretation is accepted by the courts, it would spawn endless litigation about which types of relationships establish a "physical presence." There's also a good chance Amazon would just cut off New York residents from participating in the affiliates program to save itself the headache of potentially having to comply with thousands of different taxing jurisdictions. Either way, nothing good is going to come from this.

Timothy Lee is an expert at the Insight Community. To get insight and analysis from Timothy Lee and other experts on challenges your company faces, click here.

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Should eBay Merge With Amazon?

from the growth-strategy-or-trouble-ahead? dept

Saul Hansell over at the NY Times has a thought-provoking piece asking if Amazon should buy eBay. While the two have been competitors for some time, Hansell is exactly right in pointing out that Amazon has continued to innovate and adapt, while eBay has basically held steady. eBay built up a tremendous business and has basically managed to keep that going without killing it -- but has done little of note that's new or interesting in a long time. It's recent purchases have been rather hard to understand, from Skype to Stumbleupon, and so far, haven't helped eBay very much at all. Meanwhile, Amazon keeps on innovating, improving its overall shopping experience while successfully moving into offering a variety of compelling web services (made even more compelling with the recent addition of its new database offering).

The real question might be what would Amazon do with eBay if it controlled it. There's something to be said for just having access to all those eBay users -- but could Amazon then turn them (and eBay itself) into something even more compelling? Or would tinkering with eBay be more trouble than it's worth? It might also raise questions about what Amazon would do with Skype. If anything, it seems like any such move would be quite risky. Merging two large companies with unique cultures is astoundingly difficult and often causes a lot more problems than bargained for. Amazon has been trying out a lot of innovative things lately, and trying to digest a company like eBay would risk a tremendous distraction that could hurt those projects.

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Low Taxes Aren't A Subsidy

from the logistical-nightmare dept

Economist Dean Baker thinks that Amazon owes its profits to the fact that it doesn't have to collect sales taxes for customers in states where it doesn't have a physical presence. The absence of sales taxes on Internet purchases, he says, is a "subsidy that Amazon gets from taxpayers." This is silly. Some states don't have sales taxes at all, but no one would consider that a taxpayer subsidy. My local Wal-Mart benefits from a variety of state and local government services here in the St. Louis area, such as police and fire protection, and roads and other infrastructure. At least in part, sales taxes go to cover the costs of providing those services. Amazon uses few if any services from state or local governments in Missouri, so it's hard to see anything unfair about the fact that it doesn't have to collect sales taxes here.

Timothy Lee is an expert at the Insight Community. To get insight and analysis from Timothy Lee and other experts on challenges your company faces, click here.

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E-Commerce Still Sucks When It Comes To Customer Experience

from the still? dept

Back in the early days of e-commerce, it wasn't too surprising to see the various studies saying that people often had bad e-commerce experiences, but you would hope that these days it wouldn't be so common. Unfortunately, a new study suggests that plenty of people are still having terrible customer service experiences with various e-commerce sites. And, of course, those bad experiences are leading them to do less business with the companies. Obviously, things fall through the cracks here and there and not every customer experience is going to be perfect -- but you wouldn't expect it to be so bad that nearly 90% of people surveyed said they'd had a bad e-commerce experience lately.

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